Perth Airport Pty Ltd.

Until the settlement is complete, we expect Perth Airport to continue to exercise some discretion over shareholder distributions. Should the outcome be unfavorable for Perth Airport, we expect the company to appropriately manage the capital structure such that there is no rating impact. The stable outlook on Perth Airport reflects our expectation that passenger traffic will grow by about 1%-2% over the next couple of years. This forecast, combined with the current pricing agreement with all the airlines (and assuming a supportive settlement with Qantas), will enable Perth Airport to operate with an FFO-to-debt ratio of over 9% over the next couple of years. We expect Perth Airport to take proactive steps, like the distribution holiday in fiscal 2019, if

...Aeronautical (aero) tariff agreements with all airlines (except Qantas Group) provides price certainty until 2025.Perth Airport (rated entity Perth Airport Pty Ltd., PAPL) is now in agreement with all international airlines (except Qantas Group) with respect to its tariffs. In addition, aero agreements with other domestic and regional airlines (excluding Qantas Group) were completed last year and run through to 2025, providing cash flow visibility. As we had anticipated, associated aero charges were reset to a lower level compared with the previous tariffs for the airfield and PAPL terminals, reducing revenue for the year ended June 30, 2019. Dispute with Qantas on the current tariffs creates some uncertainty. Operational control of the domestic T4 terminal reverted to Perth Airport from Jan. 31, 2019; however, Qantas and Perth Airport have still not agreed the fair market value price for the terminal. Perth Airport and Qantas are in disagreement over aeronautical charges that apply following...

Full Report